The purchasing power parity theory is a reasonably good explanation for nominal exchange rate determination:

A. in the short run.
B. in the long run.
C. when there are fixed exchange rates.
D. when there are significant volumes of non-traded goods and services.


Answer: B

Economics

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All of the following are possible outcomes of a banking crisis EXCEPT

A) depositors, but not banks, may lose all or a portion of their assets. B) a recession due to decreases in consumption by households. C) decreases in lending practices by banks. D) decreases in investment. E) a contagion effect of the crisis from vulnerable banks to financial institutions on sound basis.

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Diseconomies of scale exist over the range of output for which the long-run average cost curve is:

a. constant. b. falling. c. rising. d. none of these.

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Refer to the graph shown. The least-cost method of producing 1,000 units of output is shown at point:

A. A. B. B. C. C. D. D.

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